Farmer sentiment improved in March, according to the latest Purdue University-CME Group Ag Economy Barometer (AEB), even as concerns about rising input costs persisted. The AEB Index increased from 116 points in February to 127 in March, reflecting a cautious optimism among producers nationwide.
The Current Conditions Index rose by 6 points, while the Future Expectations Index saw a larger jump of 14 points. However, the Future Expectations Index remains 12 points below last December’s level and 16 points lower than March 2025. Notably, 46% of respondents cited high input costs as their biggest concern, up from 44% the previous month.
Approximately 18% of farmers reported that their operations were better off in March compared to a year ago. Looking ahead, 20% expect improved financial performance over the next 12 months, while 18% anticipate worse results. The Farm Capital Investment Index, which gauges planned investments in farm machinery and equipment, increased slightly by 3 points to 53. Despite this, only 4% of respondents plan to increase machinery purchases in the coming year.
Inflation and interest rate expectations remain mixed. About 39% of farmers expect consumer inflation to exceed 3% over the next year. Meanwhile, 34% believe the U.S. prime interest rate will be lower in 12 months, while 16% expect it to rise.
The survey also touched on solar energy leasing, with 12% of producers having discussed leasing farmland for solar projects in the past six months. Lease rates vary widely, with some exceeding $1,500 per acre.
Farmland value expectations showed modest gains, with the short-term index rising from 123 to 125 and the long-term index climbing from 150 to 159. Factors influencing land values include alternative investments, net farm income, and interest rates.
